Foreign investors snapped up $2.3 billion in Canadian securities in October, the largest net investment since May 2003, Statistics Canada reports.

Meanwhile, Canadian investors resumed their purchases of foreign stocks but continued to sell foreign bonds.

The Canadian securities acquired by foreign investors consisted of $1.5 billion of debt instruments, mainly bonds, and $0.8 billion of stocks.

StatsCan says October’s buying of bonds and short-term paper represented a halt to the selling of recent months; the foreign buying of equities was a continuation of what has occurred for most of 2003.

After reducing their holdings of Canadian debt instruments over the last four months, foreign investors purchased $1.3 billion of Canadian bonds and $0.2 billion of money market paper in October.

New bonds issued in foreign markets by Canadian corporations was the main impetus for a $3.1 billion foreign investment in corporate sector bonds. This was partly offset by a foreign divestment of $1.8 billion in bonds issued by Canadian governments and their enterprises.

Spurred by rising stock prices, foreign investors added a further $0.8 billion to their holdings of Canadian stocks in October. The S&P/TSX composite index posted is best monthly performance of the year, rising 4.7% in October.

Canadian investors made a small $0.6 billion investment in foreign securities in October. It was made up of purchases of $0.9 billion of equities, largely overseas equities, partly offset by a small $0.3 billion disinvestment in foreign bonds.